The following things happened as a result of the crisis, making the weaknesses in global supply networks even more pronounced for Russian escorts London:
- The EU-UK Trade and Cooperation Agreement (TCA), often known as the provisional Brexit deal, came into force on January 1, 2021, imposing a new border operating model and causing uncertainty about trade flows between the UK and the EU.
- The extraordinary circumstances surrounding the Ever Given, a massive container ship, on March 23, 2021, when strong winds and poor visibility from an Egyptian sandstorm caused the ship to become trapped sideways in the Suez Canal, closing the busiest passageway in the world for six days and freezing $40 billion worth of trade.
Now, on January 15, 2022, the Hunga Tonga-Hunga Hualapai submarine volcano erupted, probably the biggest eruption of the twenty-first century to date. This triggered devastating tsunamis in Fiji, New Zealand, Japan, Peru, and other places, reminding people of the 2010 Icelandic Eyjafjallajökull volcano eruption, which caused the worst flight disruption over Europe since the Second World War and cost $1.7 billion over eight days.
Concerns about international networks are also increased because the conflict between Russia and Ukraine is disrupting supply chains, which could hurt commodity prices and supply availability, firm-level export controls and sanctions, cybersecurity in the private sector, and overall geopolitical stability.
All things considered, company executives are becoming more aware of the need to develop backup plans for worst-case situations and are concentrating more on strengthening the resilience of their supply networks. They may get important insights for effectively anticipating, enduring, and recovering from significant disturbances in the present and the future by analyzing historical occurrences.
Lesson 1: Digitalization of the supply chain:
The COVID-19 pandemic’s effects on global supply systems have resulted in capacity problems, a 300% increase in freight prices, and a boom in the digital transformation of supply chains. The emergence of artificial intelligence (AI), augmented reality (AR), big data and analytics, and other cutting-edge technologies that promise to enhance supply chain operations by decreasing inefficiencies, lowering costs, and boosting flexibility has been the driving force behind the latter phenomena.
The crisis at the Suez Canal has made the need for supply chain flexibility even more urgent, demonstrating the importance of resilience and adaptability in situations unrelated to the epidemic. Even after the pandemic, there will always be threats to international networks that need to be taken into account for better supply chain management.
Supply chain management may be made more resilient in the future thanks to digitization, which offers essential capabilities for complete network visibility, including capacity, inventory, and demand.
Additionally, it offers resources for boosting domestic manufacturing, including 3D printing, which reduces reliance on global supply chains, high inventory costs, and asset downtime.
Blockchain stands out as a solution for components supply stability, supplier collaboration, data management, information systems, and visibility among the remarkable list of digital technologies essential to supply chain robustness. In addition to streamlining the supply chain, blockchain reduces the danger of obtaining illegal goods by enabling the detection of fake spare parts and authenticity.
Lesson #2: Risks to supply chain security:
While there are several advantages to the digital transformation of global supply chains, such as improved network visibility and connection, there is also a higher chance of cyber events. Deloitte’s study indicates that the COVID-19 pandemic has increased cyber dangers, which are expected to continue to grow in a more digital society.
A strong illustration of the significance of supply chain security is the nation-state assault that occurred in December 2020 on the SolarWinds network management system. One of the worst breaches in recent memory, it impacted more than 18,000 institutions, including the Department of Homeland Security and the Pentagon. Supply chain security management, however, needs to take into account factors like data protection, data localization, fraud prevention, data governance, and third-party risk in addition to avoiding security breaches.
Lesson #3: Multiple source options:
Up to 90% of supply chain decision-makers stated that the COVID-19 epidemic exacerbated souring concerns, which directly impacted their business. A worldwide epidemic might be disastrous for OEMs with a single supply. However, in emergencies, multi-sourcing offers a way to maintain corporate continuity.
OEMs may reduce supply chain interruption risk and cultivate flexibility by working with many vendors and diversifying their networks. Nevertheless, this makes the supply chain more complex, which may be handled with the use of software programs and automation that offer complete supply network visibility.
Lesson #4: Possibility of regional variety:
The world’s factory, China, was the epicenter of the epidemic, which had a significant impact on global supply chains. In anticipation of a future situation where a key vendor in one place is unable to supply the goods as planned, OEMs are looking into sourcing choices in previously unexplored geographic locations.
Areas such as Mexico, Malaysia, and Vietnam have garnered significant attention from businesses seeking to expand their worldwide reach and diversify their supply networks. OEMs are multi-sourcing and nearshoring at the same time by diversifying their networks; that is, they are creating localized solutions inside their networks to increase supply chain resilience.
In today’s fast-paced business world, supply chain resilience is becoming more and more crucial, and businesses of all sizes must prioritize it if they hope to survive and grow in the long run.
Businesses can make sure they are better equipped to handle disruptions brought on by things like labor strikes, natural disasters, geopolitical unrest, pandemics, health crises, supply and transportation bottlenecks, and other unanticipated events by proactively constructing resilience into their supply chains. Companies can withstand disruption storms by setting strategic imperatives around supply chain resilience and putting preparations for contingency in place.